back to article Wipro hands $75m to National Grid US after botched SAP upgrade

IT consultancy Wipro has paid National Grid US $75m to settle a lawsuit over a botched SAP implementation that cost the utility firm hundreds of millions to fix. National Grid US, which supplies electricity and gas in Massachusetts, New York and Rhode Island, wanted to replace legacy back-office systems with a SAP platform. It …

  1. Hollerithevo

    SAP, so...

    ...that was going to work out fine. I just left a company that brought in SAP for expenss and procurement and lordy what a dog's dinner.

    But i wondered why 'Indian' had to keep being repeated. What you tryin' to say, El Reg?

    1. Anonymous Coward
      Anonymous Coward

      Re: SAP, so...

      2 mentions 'Indian' and 4 mentions of 'consultancy' or 'consultants' and 13 mnetions of 'Wipro'. I think the sources and causes are well represented in that. Especially when "National Grid" is mentioned 16 times. Blame well apportioned all in all.

  2. whoseyourdaddy

    Two groups of people I no longer have warm feelings towards.

    I'm having more fun with this than I deserve.

    If you have international customers, I get it. SAP has advantages.

    Domestic US energy Utility (kindof important? Ok, really really really important...)

    Why SAP?

    1. CujoDeSoque

      Why SAP?

      They do have a software module (IS-Utilities) aimed specifically at the market and the HANA marketing pitch does sound great. There's a fair amount of utility companies already using SAP, so this isn't as much of a reach as you would imagine. I'm sure SAP could scrape together a fair amount of references. (Texas Utilities/TXU or whatever they're called these days), a utility company in Tacoma, WA and the NY Power Authority are three that come to mind off the top of my head.

      1. Anonymous Coward
        Anonymous Coward

        Re: Why SAP?

        Yeah, Oracle is stronger in utilities though via their SPL acquisition, which was the gold standard in utilities software since mainframe days.

      2. Anonymous Coward
        Anonymous Coward

        Re: Why SAP?

        They do have a software module (IS-Utilities) aimed specifically at the market and the HANA marketing pitch does sound great. There's a fair amount of utility companies already using SAP, so this isn't as much of a reach as you would imagine.

        I work for a (different) utility company in the UK. The business went for a huge cross business SAP "upgrade" a few years back using IS-U to replace those old, old legacy systems that are always alleged to be end of life, and too expensive. As a result of the SAP upgrade the business has been fined multiple tens of millions of pounds by the regulator, the entire board of directors was fired by the parent company, total project and consequential costs are probably north of half a billion quid, the business has suffered so many systems-process-performance problems that it hasn't made a profit in five years. And it has a very poor and enduring reputation for shit customer service, and that reputation isn't shifting despite the fact that things are actually vastly improved compared to a few years back. A certain Indian company beginning with W and ending with O has done the IT integrator role, draw from that what you will.

        Even now, the endless focus on "Minimum Viable Product" solutions mean that what gets built has gaps in functionality that have to be addressed by further IT projects. The quality of some of the software and implementation is poor, with extensive faults. And being SAP, any change is slow, difficult and expensive. I don't believe Oracle do it any better.

        The problem most large customer service businesses have (water, gas, electricity, fixed or mobile telecoms, ISPs, etc) is that they mistakenly think that they're not an IT business. So rather than build their own (or buy the IP of an existing system from which to build) they spend hundreds of millions on SAP and are then staggered when it doesn't work out well.

        And let me offer you a thought on buying a company with a decent baseline system - Gentrack recently bought Junifer for about £35-40m. The Junifer utility CRM is widely used by a range of small and large UK companies, so you'd be getting the keys to a modern, fully functioning, if slightly basic utility CRM. Certainly you've still got the integration issues with other corporate systems, but still would have been vastly cheaper than farting around with IS-U, which brings all the risks of SAP trying to foist HANA and their proprietary cloud solution, and SAP's complex and expensive licencing. Even if the company of which I speak had botched a fictional Junifer integration, they'd own the software so have no ongoing licence costs, they'd have access to the product developers, and it would still have been probably £200m+ cheaper than the disastrous SAP programme. As a result of the Gentrack purchase of Junifer, they'll soon be bought by the next tier up of ERP aggregators, who in turn will be bought, and over time continues until eventually the IP will be owned by SAP, Oracle, or Infor. Every time the IP is bought, the buyer pays out an acquisition premium, so there's goodwill added to the balance sheet that has to be recovered from customers, and costs go up and up - and still, eventually you're at the hands of SAP, Oracle or similar, and without control or ownership of your own systems - why as a customer would you allow this to happen to the core systems that your business relies upon?

        1. CrazyOldCatMan Silver badge

          Re: Why SAP?

          the endless focus on "Minimum Viable Product" solutions mean that what gets built has gaps in functionality that have to be addressed by further IT projects

          Which (in my experience) will have the lowest priority unless they are fixing something that's costing lots of money..

          After all, management wants new Shiny Shiny since that's what gives them brownie points with senior management.

          1. Anonymous Coward
            Anonymous Coward

            Re: "not to go through the motions of annual appraisals"

            And, I might add, that for most business applications, if your MVP doesn't include security, it ain't viable, period.

        2. Alan Brown Silver badge

          Re: Why SAP?

          "Even now, the endless focus on "Minimum Viable Product" solutions mean..."

          ...that whatever's used, you're putting glitter on a turd.

          And it will stay that way until a board of directors with a clue comes into existence, or the company goes bust.

    2. arthoss

      First of all this seems to have been an implementation of SAP HR, FI, CRM, SCM, etc. (and you're referring to CRM in your comment).

      SAP is the best payroll system in the world if you want to run it on your own. SAP FI is top notch as well. It's a proper on-premise solution, which is preferred by institutions from the public sector. It's not easy to do a proper move from one older system to another. We needed about 5 years to do it for a huge public sector institution, with at least 20 people permanently on the job, most of the time double or more. We had an excellent project manager who knew SAP HR and FI, I think that's what made the difference (SAP provided him and half of the consultants).

      1. Denarius

        Payroll ?

        Arthoss, maybe it is just the scale of SAP payroll implementations going bad in news that cause a degree of skepticism to your assertion. No doubt PHB gullibility about shiny shiny from sales weasels plays a part along with the lack of older, cynical, knowledgeable staff on payroll of client also.

        1. arthoss

          Re: Payroll ?

          4 million personnel numbers managed and paid, worked like a charm. But you have to maintain focus for the entire duration of the project. Companies have to learn to wait for the best consultants - till they're out of the current projects. Companies exist for hundreds of years so why hurry. Get the best consultants, get the best plan, pay the right price and you'll get something that will run 50 years if you want. As a rule of thumb I'll say if SAP themselves is not involved in the huge project at all, you have to be really careful.

    3. Anonymous Coward
      Anonymous Coward

      SAP never makes sense. I used to implement it and there is about a 50% of disaster with marginal, at best, upside. Why people continue to implement SAP is a complete mystery to me. If there were any other business that sold a product which was enormously expensive, not infrequently destroyed their customers' businesses and had upside in the 10% range, I doubt they would have a customer. SAP needs to stop blaming the SIs too. Every major SI has had many failed SAP projects. That means your software is a dog and near impossible to implement.

      Say what you will about Oracle, way easier to implement.

      1. Alan Brown Silver badge

        "Say what you will about Oracle, way easier to implement."

        Perhaps, but a bloody disaster to actually use.

  3. CujoDeSoque

    As a SAP Consultant that worked on SAP Utilities software....

    This is a specialized field. Only a handful of firms did this, including one I worked for in the US (Axon Global now sucked up by ATOS in the US). I also worked at Wipro on a very large account so I know a bit about both.

    Wipro is a cheap alternative but you get what you pay for. They do have some good staff but they don't pay very well and as it's an overseas firm, not too many US workers, at least by comparison with the more expensive consultancies. That leads to a fair bit of turnover among the US workers especially when it's discovered that raises don't exist for the most part and greener pastures beckon. Much like IBM, really...

    Much of my knowledge is of Wipro/Tata/et alios ad nauseam being brought in after either a budget cut by the client or as maintenance partners after implementation, so it's not quite fair to castigate them when IBM/PW and others (Accenture!) have has massive lawsuits due to much the same claims.

    I did notice that Wipro tended to try to work with clients more flexibly than the US Big 4, it seems half the reason for some of the low estimates was to bill out fully on anything not explicitly named. (change Orders = Big Bux, dammit!) But I'm having a hard time seeing how the client allowed this stuff without testing. From the sound of it, some of these should have been caught in QA. So it's far more likely that some of this goes back to the client.

  4. Anonymous Coward
    Anonymous Coward

    Wow, a massive SAP screwup. That almost never happens !

    1. Anonymous Coward
      Anonymous Coward

      True, this is a dog bites man story. It would be newsworthy if an SAP implementation ever finished on time, on budget and did what the sales people said it would do.

      1. Anonymous Coward
        Anonymous Coward

        RE: "...and did what the sales people said it would do."

        On-time: might be possible

        On-budget: unlikely

        Does what the sales people say? Sure...and Santa Claus will deliver you a present filled with the extra budget you need and the Easter Bunny has a basket full of extra features that you didn't know you needed until Easter.

      2. Hans 1

        did what the sales people said it would do.

        That never, ever happens ... except when we do it! Our sales guyz are techies turned sales... they carried out implementations in the trenches for customers before turning to sales.

        Here, GoLive was not properly prepared, not properly tested and apparently, they had no fallback. PRINCE2, anyone ? This is not a problem with SAP, Oracle or whatever, it is a project manager who decided to GoLive2Disaster ...

  5. Anonymous Coward
    Anonymous Coward

    "$75M....after botched SAP upgrade"

    We are about to witness the beginning of the greatest mass transfer of money since, well, since somebody paid their SAP invoice.

    Right now, a million lawyers are reaching for their letterhead.

    "You can sue for SAP projects??!!??", they're asking.

    (The word "botched" is redundant.)

    1. Denarius

      Re: "$75M....after botched SAP upgrade"

      Isn't the lack of such lawyerfests a mystery given the number of stories of discontent with SAP implementations ? My own limited experience was that SAP could make any process more time consuming, less intuitive and less complete when "complete". Also way more expensive. Perhaps because I was working in government disorganisations, the client did not know how to specify a problem and remediation requirements so that vendor could do what was needed ? This would skew the assessments.

      1. Anonymous Coward
        Anonymous Coward

        Re: "$75M....after botched SAP upgrade"

        Isn't the lack of such lawyerfests a mystery given the number of stories of discontent with SAP implementations ?

        There's been a few others (eg British Gas/Accenture), but the buyer needs to be very confident that they kept to their contractual obligations, otherwise they won't win. And since much of the detail becomes public in a court case, that's high risk. In most failure cases, all parties are at fault, in which case the chances of winning are small, and if you don't win (certainly in UK law, though not US) you can end up paying both sides legal costs, as well as possibly opening yourself up to a counter-claim for reputational damage.

      2. CrazyOldCatMan Silver badge

        Re: "$75M....after botched SAP upgrade"

        Isn't the lack of such lawyerfests a mystery

        Presumably SAP (like Oracle) spends an unfeasable amount of money on in-house lawyers to make sure that such things either don't happen or go away quietly..

      3. Alan Brown Silver badge

        Re: "$75M....after botched SAP upgrade"

        "Perhaps because I was working in government disorganisations, the client did not know how to specify a problem and remediation requirements so that vendor could do what was needed ? "

        But the same incompetent buffoons were prone to shifting the goalposts mid project and utterlly incapable of writing watertight contracts.

        But that doesn't matter, because they simply use threats and beration to silence all critics until the problem is too big to ignore, then get paid handsomely to fuck off, because there's no other way to get rid of them without a massive legal fight and years of delays.

  6. Anonymous Coward
    Anonymous Coward

    I think SAP is about to start getting replaced on a regular basis for a few reasons.

    Their software is dog old. Ancient ABAP stuff from the 70s that has been hated by users since the 70s.

    Their cloud story is a mess. They have all these random acquisitions which they are trying to squeeze in somewhere (ironically exactly what they used to make much of Oracle doing). They have their IaaS partnerships. They have the useless HEC cloud... A mess.

    HANA is a complete money grab and the opposite of what people want in software. Everyone else is going SaaS where the software company includes and manages the database (even Oracle, the database company). SAP decided that people want to pay millions upon millions to flip out a mature database with an immature database and then manage it.

    No one wants multi year, multi million dollar software upgrade projects in the SaaS era. That is ridic.

    People no longer think you need to buy all your Enterprise software from one company, which was always how SAP won... their integrated story. People would rather have best of breed.

    1. arthoss

      I don't know where you get your data from, it seems like you're generalising ...

      Cloud is a mess in general, not just at SAP. We're devolving in ERP software because of the cloud hype to the state of the 80s where nothing was properly integrated. Let's talk in 5 years when this generation repeats history. It's partly SAP's fault for promoting their cloud products at the expense of the on-premise products. Making experience with two cloud solutions and they're just puerile compared to classic SAP - unstructured information, missing information structures that are long required by law, basic workflows, it's just unbelievable customers accept it - and then they keep the classic SAP because it does what it's supposed to do. And with all the new economy wars I expect that "cloud" will be deployed in each country to avoid blocking and just like with netflix some parts of it won't work from certain countries (for multinational companies). Cloud won't ever work 100%, no matter how evolved we are (one country) - because at some point we'll have to move to other planets.

      SAP software is not dog old. Is actually legally up to date in many countries. If users hate anything that might be the UI but why would a normal user know about ABAP? ABAP's power is in its APIs which are massive - the libraries of all kinds of business functions and legal implementations - so what if it's old, normal functional consultants can understand it, which wouldn't be the case if it would be a super fancy new language. Change for the sake of change, from SAP, that's a recipe for success... of the consulting companies riding the latest trends not for the customer. Slap a version of SAPGui for the iPad packaged with a VPN connection and you're good to go with all current SAPGui applications - that could be something that SAP could do in a jiffy (why aren't you doing it SAP?).

      "People would rather have best of breed" - yeah well if you skip leg day you can't do chicken shit in real life - it all has to work together otherwise your just creating a Frankenstein monster. The cloud house is creaking at its junctions - the customer will tend to the junctions instead of tending to the walls and other parts as before.

      I don't get why some of you here have such negative feelings towards SAP - SAP is a complete software suite that considerably simplifies work and can be customised to fit the most complex processes. That is not the case with the new high kids on the block.

      1. Anonymous Coward
        Anonymous Coward

        The largest problem that SAP has is that they are no where with SaaS, if you don't include some random acquisitions which have nothing to do with core SAP. They don't even have a plan to have a SaaS product which will be released some number of years from now. Oracle is all SaaS. Workday is all SaaS, although immature is some areas. Salesforce is all SaaS. Only SAP is in this on premise world where you spend two years implementing a point update, if you ever update the software. Only SAP is in the world where a customer needs to give them a $100 million to start a project and find out if it works or not. Not saying that all SAP will be gone next year or next decade, but I'm not sure why anyone would implement any new SAP now... Paying for HANA and S/4, no way.

        1. arthoss

          SAP’s stupidity was to think that acquiring a cloud solution will suffice. But through that they didn’t get to put their ingrained wisdom into the SaaS suite. Also, pushing customers to the “cloud” only meant customers thought it viable to move to a different suite altogether (hey it works with success factors so it will work with any other).

          Customers generally implement updates twice a year and it takes about 3 weeks (mostly because you have to test a lot of stuff and some things need to be fixed). All public sector is no go for data that is not under their control, so there are projects with SAP still. The only reason why there is indeed a bit of a handbrake on the sap implementations these days is SAP’s faltering commitment to the on-premise solution. Well they did say they’re preparing a new on premise version for 2023 and that will be supported till 2030. 7 years is nothing - they should commit to 20 years at least.

  7. AlexGreyhead

    Something I'm hoping the more-experienced Reg commenters could explain; why, if the estimated cost to the National Grid was ~$1bn, and was confirmed to be at the very least ~$300m, did they accept a settlement of $75m?

    (Genuinely interested as I don't understand why they would accept such a low amount).

    1. Anonymous Coward
      Anonymous Coward

      Because they got this through an out of court settlement, so didn't have the risk of taking it to court (which includes a risk of winning nothing, and of counter-claims), they avoid the delay and legal costs of trial, the embarrassing public disclosures of how both sides screwed up. NG never expected to win the full $1bn. Also, by taking any settlement, NG have created a situation where on causal observation it seems Wipro have informally admitted guilt...and in that respect, read these next couple of paragraphs

      In court, NG would have got nothing for anything that was largely their own fault, and Wipro's lawyers would have been pointing to the myriad "client failures" that contribute in any big IT screwup. Even things that were largely Wipro's fault, if Wipro could show that NG contributed in some small way to the problem their liability is greatly reduced. But take a look at the link below, and read the list of bullet pointed errors under the heading "Audit Findings". These can be summarised as NG asked for too much, too soon, too cheaply, and without providing the necessary resource and data foundations to enable success. Those rest with NG's management, and although I get the impression that Wipro are invariably associated with cheap, low quality work, I'd say splitting the costs $75m to Wipro and $925m to NG sounds about fair. Indeed, a better headline for the article would have been Wipro Wipe Brow Thankfully As National Grid Chew On $925m Cost Of Fail"

      1. John Smith 19 Gold badge

        Good report. Upper Edge sound an interesting company.

        If you're an American.


  8. Anonymous Coward
    Anonymous Coward

    Predictive Analytics

    This was predictable and happens a lot, however its only cos it happened to National Grid US that it went to litigation... National Grid UK should have taken Accenture the same way for the mess they made on that project, but Accenture are better at schmoozing the execs to avoid it.

  9. Anonymous Coward
    Anonymous Coward


    I know its Indian outsourcers but clients are also responsible for signing off it works after testing. Or did they just skip that bit?

    1. CrazyOldCatMan Silver badge

      Re: testing?

      Or did they just skip that bit?

      That's the magic of DevOps baby! No need to do that boring testing stuff, we'll just fix it in the next release!

      1. Claptrap314 Silver badge

        Re: testing?

        The first thing that DevOps generally gets used to do is to automate testing. What ARE you going on about?

  10. Stevie


    I spoke to an Indian IT specialist only last night and he assured me that the problem was almost certainly that their vindows were infecting the internet with viruses.

  11. PeterM42


    would ANYONE implement SAP? Does NOBODY read (recent) history?

    And using Wipro - Ah! - they obviously wanted to offset the cost of SAP.

    Well - they got what they paid for.

    HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA!

  12. Anonymous Coward
    Anonymous Coward

    A large-scale integration.

    A programming language and lots of promises.

    Saving money by going for inexperienced implementors, integrators and developers.

    It is wonderful that there are still projects that do get adopted.

  13. John Smith 19 Gold badge

    Lots of people posting AC here.

    Looks like a great ERP Marketing opportunity to me.

    So all the usual causes of project failure (PHB Hubris, very ambitious timelines, badly defined goals, poor availability of domain experts to point out where they were f**king up etc).

    Is SAP big? Yes, as is any suite that offers comparable functions (which are wide and deep).

    Perhaps they should have started with a simpler question.

    Which ERP system maps the best to our business? Because it looks like they did "Everyone else is using SAP, we should as well." But then they didn't talk to any of the "Everyone else" who'd done it. Which might have told them "Yeah we got it working, but you got to watch XXX (specific implementation area/process) like a hawk if you don't want it to fail."

    I think it's only the US litigation and transparency laws that gave us even this level of insight into what happened.

    I reckon there was plenty of fail to go round. But you hire cheap con-tractors shouldn't you expect trouble?

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like